Question
In: Finance
Ramblin Wreck is a firm specializing in engineering components. The firm is publicly traded and is...
Ramblin Wreck is a firm specializing in engineering components. The firm is publicly traded and is considering the following project:
The project will last 5.00 years with an annual cash flow of $40.00 million. The project will require an initial investment of $140.00 million
The firm must determine the cost of capital to evaluate the project. (The project is within the firm’s normal activities)
Ramblin Wreck, Inc. Financial Data:
| STOCK DATA: | BOND DATA: | ||
|---|---|---|---|
| Current Price Per Share | $29.00 | Current Price Per Bond | $924.00 |
| # of Shares | 2.00 million | # of bonds | 20,000.00 |
| Book Value | $50 million | Annual Coupon Rate | 8.00% |
| Face Value Per Bond | $1,000 | ||
| Maturity | 10 years |
The risk free rate in the economy is currently 2.00%, while
investors have a market risk premium of 6.00%. Ramblin Wreck, Inc.
has a beta of 1.44. The tax rate is 38.00%.
What is the WACC for the project?
Submit
Answer format: Percentage Round to: 2 decimal places (Example: 9.24%, % sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924))
Solutions
jeff jeffy answered 2 years agoRelated Solutions
Ramblin Wreck is a firm specializing in engineering components. The firm is publicly traded and is...
Ramblin Wreck is a firm specializing in engineering components.
The firm is publicly traded and is considering the following
project: The project will last 5.00 years with an annual cash flow
of $40.00 million. The project will require an initial investment
of $140.00 million The firm must determine the cost of capital to
evaluate the project. (The project is within the firm’s normal
activities) Ramblin Wreck, Inc. Financial Data: STOCK DATA: BOND
DATA: Current Price Per Share $30.00 Current Price...
Ramblin Wreck is a firm specializing in engineering components. The firm is publicly traded and is...
Ramblin Wreck is a firm specializing in engineering components.
The firm is publicly traded and is considering the following
project:
The project will last 5.00 years with an annual cash flow of
$40.00 million. The project will require an initial investment of
$140.00 million
The firm must determine the cost of capital to evaluate the
project. (The project is within the firm’s normal activities)
Ramblin Wreck, Inc. Financial Data:
STOCK DATA:
BOND DATA:
Current Price Per Share
$29.00
Current Price...
Ramblin Wreck is a firm specializing in engineering components. The firm is publicly traded and is...
Ramblin Wreck is a firm specializing in engineering components.
The firm is publicly traded and is considering the following
project:
The project will last 5.00 years with an annual cash flow of
$40.00 million. The project will require an initial investment of
$140.00 million
The firm must determine the cost of capital to evaluate the
project. (The project is within the firm’s normal activities)
Ramblin Wreck, Inc. Financial Data:
STOCK DATA:
BOND DATA:
Current Price Per Share
$28.00
Current Price...
Ramblin Wreck is a firm specializing in engineering components. The firm is publicly traded and is...
Ramblin Wreck is a firm specializing in engineering components.
The firm is publicly traded and is considering the following
project:
The project will last 5.00 years with an annual cash flow of
$40.00 million. The project will require an initial investment of
$140.00 million
The firm must determine the cost of capital to evaluate the
project. (The project is within the firm’s normal activities)
Ramblin Wreck, Inc. Financial Data:
STOCK DATA:
BOND DATA:
Current Price Per Share
$29.00
Current Price...
Ramblin Wreck is a firm specializing in engineering components. The firm is publicly traded and is...
Ramblin Wreck is a firm specializing in engineering components.
The firm is publicly traded and is considering the following
project:
The project will last 5.00 years with an annual cash flow of
$40.00 million. The project will require an initial investment of
$140.00 million
The firm must determine the cost of capital to evaluate the
project. (The project is within the firm’s normal activities)
Ramblin Wreck, Inc. Financial Data:
STOCK DATA:
BOND DATA:
Current Price Per Share
$28.00
Current Price...
Publicly traded companies, including those specializing in e-commerce, are required to file financial data with the...
Publicly traded companies, including those specializing in
e-commerce, are required to file financial data with the Securities
and Exchange Commission. By analyzing this information, you can
determine the profitability of an e-commerce company and the
viability of its business model.
Pick on e-commerce company on the Internet, for example,
Buy.com, Yahoo.com, or Priceline.com. Study the web pages that
describe the company and explain its purpose and structure. Use the
web to find articles that comment on the company. Then visit...
Assume you are a shareholder in a publicly traded retail firm. Would you want that firm...
Assume you are a shareholder in a publicly traded retail firm.
Would you want that firm to raise pay rates for its employees to
stay on pace with the inflation rate, even if doing so would drive
product prices up and profit margins down? Can you explain why for
me please?
Select a publicly traded company and a publicly traded, large partnership. Analyze how they are treated...
Select a publicly traded company and a publicly traded, large
partnership. Analyze how they are treated for tax purposes.
Describe the differences in taxation of their income, formation,
dissolution, and liquidation, as well as the responsibilities borne
towards creditors and taxing authorities by partners, shareholders,
partnerships, and corporations.
As a CPA in public practice, which type of business organization
would you advise a client to adopt among sole proprietorships,
various forms of partnerships, and various forms of
corporations?
MAKE A...
The BakFirn Corporation, a publicly traded firm, has contracted with YOUCPA, your public accounting firm, for...
The BakFirn Corporation, a publicly traded firm, has contracted
with YOUCPA, your public accounting firm, for an audit. The BakFirn
Corporation manufactures specialty construction tools. The tools
are used in the unique construction of homes, warehouses, and
multiunit dwellings. The prices range from $1,000 to $5,000 per
unit.
During the audit, the audit team has determined the risk
assessment of the client. Consequently, the audit has to respond to
the assessed risks of material misstatement at the financial
statement and...
The BakFirn Corporation, a publicly traded firm, has contracted with YOUCPA, your public accounting firm, for...
The BakFirn Corporation, a publicly traded firm, has contracted
with YOUCPA, your public accounting firm, for an audit. The BakFirn
Corporation manufactures specialty construction tools. The tools
are used in the unique construction of homes, warehouses, and
multiunit dwellings. The prices range from $1,000 to $5,000 per
unit.
During the audit, the audit team has determined the risk
assessment of the client. Consequently, the audit has to respond to
the assessed risks of material misstatement at the financial
statement and...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- In two or three sentences, explain how you have seen the concept of grit work in...
- You have invested 30 percent of your portfolio in Jacob, Inc., 40 percent is Bella Co.,...
- Parallel Arrays This question is in MindTap Cengage Summary In this lab, you use what you...
- 5. You have invested 30 percent of your portfolio in Jacob, Inc., 40 percent is Bella...
- JAVA Write a test program that prompts the user to enter a series of integers and...
- (2) Cite an example on how organizations like Google, Facebook, Youtube etc collect data for image...
- The legal landscape is perpetually changing. Psychologists must remain abreast of these changes to avoid potentially...
ADVERTISEMENT